Marijuana Business Magazine October 2019

Marijuana Business Magazine | October 2019 18 BIG HITS Sundial Closes $143 Million IPO Raise Calgary, Alberta-based cannabis company Sundial Growers closed its initial public offering Aug. 6, raising $143 million in the process. The company, which trades on the Nasdaq under the ticker symbol SNDL, expects to use proceeds to complete the construction and expansion of its cultivation and processing facilities. Any remaining funds from the IPO could be used for possible acquisitions, the company said. GreenAcreage REIT Closes $141 Million Share Raise GreenAcreage Real Estate Corp., a real estate investment trust (REIT) serving the cannabis industry, said it raised $141 million from a private placement of approximately 7 million shares. GreenAcreage, which has a strategic relationship with New York- based multistate operator Acreage Holdings, said it will use the proceeds to help cannabis operators gain access to long-term capital to aid their growth plans. Sentia Wellness Raises $91 Million for CBD Production Sentia Wellness, a CBD-focused startup, raised $91 million in a combination of debt and equity. The company, started by former Cura Partners executives such as former Chief Operating Officer Angelo Lombardi, is reported to be buying a former Boyd Coffee Co. facility in Portland, Oregon, to use as a CBD production plant. Flowr Corp. Closes $33 Million Share and Warrant Offering Toronto-based cannabis company The Flowr Corp. closed its offering of shares and warrants for proceeds totaling $33 million (CA$43.5 million). The net proceeds of the offering are expected to be used to fund the company’s purchase of the outstanding shares in Holigen Holdings (an approximately 80% interest) as well as help fund cultivation and production facilities both at Holigen and Flowr. Canndescent Closes $27.5 Million Series C funding Canndescent, a Santa Barbara, California-based producer of premium cannabis, said it closed a $27.5 million Series C funding, the proceeds from which will be used to help the expansion of the company into vapes and ingestibles as well as support its operations in Massachusetts, Nevada and Canada. The funding was led by Canadian cannabis investment company Green Acre Capital with support from several other investment groups, including an unidentified Asian beer company. $972.8MILLION The amount of money raised in the cannabis industry in August. This compares with $369.3 million raised in August 2018. While the amount of closed capital raises in August was approximately the same (38 in 2019 versus 39 in 2018), the average size of each raise was considerably higher, $25.6 million in 2019 versus $9.5 million in August 2018. Overall, a total of $5.4 billion was raised through the end of August, compared with $3.54 billion in the same period last year. toward health-oriented and whole-food-infused options. Within the supply chain, we remain underweight in those sectors that will see revenue declines and overweight in those that will see margin expansion as prices continue their downward trajectory. Outside the supply chain, we focus on scalable ancillary businesses that can either withstand corporate competition in a fully legal environment or grow to become attractive acquisition targets. Additionally, frontier markets with meaningful addressable populations, limited licenses, capital friendliness and supportive governments can provide some relatively uncorrelated gems for a globally focused cannabis investment portfolio. What are some of the typical red flags that cause you to pause and maybe eventually pass on a potential investment? Major reasons include: Management: The cannabis industry attracts many innovative entrepreneurs with little business experience. The industry has its share of incredible and exciting challenges, which makes it important that management have the experience and wisdom to navigate turbulent business waters. Accounting: Look for third-party audits on at least two years of historical company statements. Review tax returns and be wary of companies that are reticent to provide them. Money Matters | Nick Thomas